For a money manager, there aren’t many things worse than having your name paired up Charles Ponzi in the same sentence.
After all, the words Ponzi and trust are about as far apart as you can get—sort of like the difference between the words heaven and hell.
A nearly penniless Italian immigrant, Ponzi bilked thousands of investors out millions in 1920. His bait, however, was as old as the hills. He promised his investors a 40% return in just 90 days.
But behind the scheme there was absolutely nothing at all. The promised investment in postal stamps was never made and Ponzi simply “robbed-Peter-to-pay-Paul.”
And when no more greater fools could be found, “Ponzi’s scheme” blew up in everyone’s face.
Of course, compared to Bernie Madoff, Ponzi was actually something of a lightweight.
As Madoff’s scam unraveled we learned that his con had totaled over $50 billion. That made his take the greatest investment scam of all time, earning him a life sentence in prison.
And in case you are wondering, this is how Bernie spends his day now….
From New York Magazine by Steve Fishman entitled: Bernie Madoff, Free at Last
“Last August, shortly after his arrival at the federal correctional complex in Butner, North Carolina, Bernard L. Madoff was waiting on the evening pill line for his blood-pressure medication when he heard another inmate call his name. Madoff, then 71, author of the most devastating Ponzi scheme in history, was dressed like every other prisoner, in one of his three pairs of standard-issue khakis, his name and inmate number glued over the shirt pocket. Rec time, the best part of a prisoner’s day, was drawing to a close, and Madoff, who liked to walk the gravel track, sometimes with Carmine Persico, the former mob boss, or Jonathan Pollard, the spy, had hurried to the infirmary, passing the solitary housing unit—the hole—ducking through the gym and the twelve-foot-high fence and turning in the direction of Maryland, the unit where child molesters are confined after they’ve served their sentences. As usual, the med line was long and moved slowly. There were a hundred prisoners, some standing outside in the heat, waiting for one nurse.
Madoff was accustomed to hearing other inmates call his name. From July 14, the day he arrived, he’d been an object of fascination. Prisoners had assiduously followed his criminal career on the prison TVs. “Hey, Bernie,” an inmate would yell to him admiringly while he was at his job sweeping up the cafeteria, “I seen you on TV.” In return, Madoff nodded and waved, smiling that sphinxlike half-smile. “What did he say?” Madoff sometimes asked.
But that evening an inmate badgered Madoff about the victims of his $65 billion scheme, and kept at it. According to K. C. White, a bank robber and prison artist who escorted a sick friend that evening, Madoff stopped smiling and got angry. “Fuck my victims,” he said, loud enough for other inmates to hear. ‘I carried them for twenty years, and now I’m doing 150 years.’
That’s just the beginning of one great and truly fascinating read….
Jon Stewart on the BP Oil Spill
The Social Security Ponzi Scheme
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